Meanwhile, the federal government can borrow money very cheaply — the interest rate on inflation-protected 10-year bonds is only about 1 percent. These low borrowing costs, in turn, reflect what seems to be a persistent savings glut — that is, the private sector wants to save more than it’s willing to invest, even with very low interest rates.
Paul now wants to be counter cyclical, prepping the government for some stimulus today in anticipation of the recession tomorrow, just like Trump.
The yield curve collapsed last month, finally and for good, we are waiting for the bond traders to start the mass layoffs. So, yes, if one is kanosian, now is the time to be coutner cyclical, but no one really wants to be kanosian until they are on the receiving end of a bailout.
Paul Krugman, in spite of all his rhetoric, is one of the biggest pro-cyclical policy wanks around. To the extent that govs took his advice, they are right back in the muddle, on schedule.
What was pro-cyclical about Obama? He eft the hard choices on Obamacare to the next pres, and he and his policy wanks lied about. Noticeable, one sided tales all the way through the debate. They get the expected counter election, and a tax cut. He has played the pro cyclical game his entire career, all the while claiming the opposite.
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